INTRODUCTION

As pioneers of global sourcing, financial services firms have played a significant role in the growth and maturation of the offshore services industry. In light of the credit crisis in the United States and the resultant profitability pressures on financial institutions, multiple stakeholders (buyers, suppliers, captives, investors and country associations) are seeking to understand current trends, opportunities and implications for the global sourcing market for financial services. Further, given the increasing adoption and potential for growth in Business Process Offshoring (BPO), an understanding of BPO trends in financial services has become exceedingly important. This research examines the fundamentals of offshoring by financial institutions and provides adoption trends, market maturity and future opportunities in each of the three key financial services segments – banking, capital markets and insurance.

SCOPE

This study focuses on three key financial services segments:

• Banking
• Capital markets
• Insurance

We focus on:

• Overview of global sourcing for financial services
• BPO trends for financial services
• Market maturity and future outlook for each financial services segment
• Key implications

CONTENTS

This research report provides an overview of global sourcing trends in financial services with a special focus on BPO in financial services. It examines and contrasts market maturity, value drivers, sourcing models and the supplier landscape, across the three key financial services segments – banking, capital markets and insurance. This report also provides a detailed assessment of the current BPO market maturity and future BPO opportunity areas for each of the three financial services segments. In addition to providing key implications from the research for financial services buyers and suppliers, this report also provides two detailed case examples of global sourcing leverage by leading financial institutions.

Some of the findings in this report among others are:

• The financial services industry, which pioneered the adoption of offshoring, continues to account for approximately 40-45% of the global sourcing industry worldwide
• Financial services buyers across banking, capital markets and insurance, have large footprints offshore in terms of headcount, functions being sourced, and delivery locations
• Insurance is the most mature segment of financial services. Horizontal functions are currently more mature than vertical-specific functions
• Financial services buyers have pioneered multiple sourcing models and continue to innovate with more complex delivery models using a mix of captives and suppliers, across multiple locations
• The five-year market opportunity for financial services BPO is US$145-165 billion for India alone. This represents a growth opportunity of 40-45 times the current market size for banking and capital markets, and 12-15 times for insurance